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Stanley Gibbons Group: Financial & Operating Highlights, Strategic Focus

Discover the financial growth and strategic direction of Stanley Gibbons Group, focusing on sales, investments, and market expansion. Learn about key achievements, acquisitions, and future prospects for the iconic collectibles brand.

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Stanley Gibbons Group: Financial & Operating Highlights, Strategic Focus

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  1. The Stanley Gibbons Group Final Results Investors Presentation 25 March 2011 1

  2. Contents Pages 1. Financial Highlights 3-5 • Operating Highlights 6-8 • Outlook & Strategic Focus 9-10 • Internet Development Update 11 • Acquisitions 12 • Management Team 13 Appendix I Income Statement 14 Appendix II Balance Sheet 15 Appendix III Cashflows 16-17 Appendix IV Contact Details 18 2

  3. Financial Highlights 3

  4. Financial Highlights • Sales up 13% with key growth areas being philatelic dealing, investment services, auction commissions and rare historical signatures • Sales stated net of a reduction of £1.55m, with associated profit of £0.31m relating to a sale made to an investment client in 2009 which was repurchased in October 2010. Excluding this exceptional adjustment, sales were 20% up on prior year • Gross margin% up from 42.9% to 43.8% benefiting from a reduction in previous provisions made against investment products offering guaranteed minimum returns • Adjusted profit before tax, excluding exceptional charges of £4.5m (2009: £4.1m), up 8% • Proposed final dividend of 3.25p (2009: 3p), giving a total dividend for the year of 5.5p (2009: 5p), up 10% 4

  5. Financial Highlights • Cash generated in year of £6.3m (2009: £2.4m) reinvested in stockholding of investment grade items • Stock levels at 31 December 2010 of £14.8m (2009: £9.3m), up 59% • Reinvestment of surplus cash balances into high quality rare stock items to support future growth and to provide a higher return to shareholders in current low interest rate environment 5

  6. Operating Highlights • Completion of the substantial refurbishment works on our flagship retail premises at 399 Strand in April 2010, presenting the brand image in line with our mission, to become the largest collectibles business in the world • Strong sales to ultra high net worth clients benefiting from our ability to source exceptional and rare collectible “trophy” items and top quality rare stamps known to be in areas of interest to our clients • Development into the Chinese rare stamp market generating £1m sales in the year • Investment office in Jersey generated sales of £0.7m to Jersey residents from the recruitment of new high net worth clients 6

  7. Operating Highlights • The Benham Group contributed sales of £0.6m and profits of £0.2m in the last quarter of the year • Excellent ROI from our heightened marketing and PR activities directed towards recruiting new high net worth clients • 24% increase in autograph sales through focus on the sourcing and sale of “trophy” items and key historical documents • Auction commissions up 22% on the prior year reflecting the growing strength of this area of our business 7

  8. Operating Highlights • Poor performance from Publishing division in year with a 9% drop in profit contribution. Rationalisation programme generating future annual cost savings of £0.15m implemented in first quarter of 2011. • Online revenues up 5% in year, representing 7% of total sales • Increase in overheads of £1.2m in year primarily being an investment towards delivering returns in future accounting periods including: • Benham overheads (£0.2m) • Salary costs (£0.4m) • Marketing costs (£0.4m) • Depreciation charges (0.1m) 8

  9. Outlook & Strategic Focus • Development of online trading platform, similar to the Amazon and eBay models • Further development of trading in lucrative Chinese stamp market. This includes the sale of rare stamps from China to our client base and the sale of our products to the 20 million (and rising) Chinese collectors • Building a presence in the US market, representing the biggest collectibles market in the world • New investment offices in Switzerland and Hong Kong, to replicate success of investment offices in Guernsey and Jersey • Working with a highly respected financial institution in Jersey towards the launch of a rare stamp investment fund 9

  10. Outlook & Strategic Focus • Delivery of returns from recent acquisitions – Benham Group and M & N Haworth • Maximising opportunities from Royal Wedding in April through sale of associated first day covers and other commemorative collectible products. Similar benefits expected in 2012 from the London Olympics. • Diversification into other collectibles possessing similar qualities to rare stamps such as coins, medals and first edition books • Continued strengthening of our auction division with the aim of becoming the “Number 1” UK stamp auction house within the next three years 10

  11. Internet Development Update • Successful implementation of Digital Asset Management system in 2010, representing a substantial step forward in the management of data for both online and print publishing • New Fraser’s Autographs website, www.frasersautographs.com launched in February 2011 and has already reported an encouraging uplift in online revenues • Principal components of our primary website, www.stanleygibbons.com, will be launched shortly • Online trading platform scheduled for launch in the 2nd quarter of 2011 • Total investment on above projects of £0.6m in 2010, with a further investment of £0.2m forecast for 2011, including the development of the Benham website 11

  12. Acquisitions • Acquisition of the business and certain assets of specialist stamp dealer, M & N Haworth completed on 31 August 2010 for a consideration of £0.3m, financed out of cash resources with an expected payback within 12 months • Acquisition of the trade and assets of Benham, the leading publisher of high quality first day covers, completed on 20 September 2010 for a consideration of £1.5m with half paid on completion and the balance payable 12 months later. The consideration was financed by a bank loan of £0.75m; the balance to be funded from cash resources. Expected payback within 4 years. • Target acquisitions in both rare stamps and other collectibles where we believe they would strengthen and compliment our overall brand offering • Acquisitions to support geographical expansion into new markets also being considered 12

  13. Management Team • Board changes during year: • John Byfield, appointed April 2010 (Non-executive director) • John Wright, resigned May 2010 (Non-executive director) • Key managerial appointments in year: • Managing Director of Benham Group (Business Development Director) • Compliance & Administration Manager, Investment services • Retail Manager, 399 Strand • Key target appointments in 2011: • Head of Auctions • Head of E-commerce • Publisher • Publishing division undergoing rationalisation programme generating cost and efficiency savings as we develop more towards online publishing 13

  14. Appendix I - Income Statement 14

  15. Appendix II – Balance Sheet 15

  16. Appendix III - Cashflows 16

  17. Appendix III - Cashflows 17

  18. Appendix IV – Contact Details The Stanley Gibbons Group plc, Registered Office Martin Bralsford, Chairman Donal Duff, Chief Operating Officer 6 Vine Street St. Helier, Jersey, JE2 4WB Tel: 01534 766711 Email: info@stanleygibbons.co.uk Stanley Gibbons (Guernsey) Limited Mike Hall, Chief Executive 18 Le BordageSt. Peter Port, Guernsey, GY1 1DE Tel: 01481 708270 Email: investment@stanleygibbons.co.uk Stanley Gibbons Limited Richard Purkis, Corporate Services Director 399 StrandLondon, WC2R 0LXTel: 020 78368444 Email: info@stanleygibbons.co.uk Stanley Gibbons LimitedMark Henley, Finance Director 7 Parkside, Christchurch RoadRingwood, Hampshire, BH24 3SH Tel: 01425 472363 Email: info@stanleygibbons.co.uk 18

  19. “…stamps’ day as an alternative asset class has come – and long-term returns can be first class.” David Stevenson, Financial Times 28 May 2010 Questions? Contact Details: Mike Hall, Chief Executive Tel: +44 (0)1481 708273 Mobile: +44 (0)7781134404 Email: mhall@stanleygibbons.com 19

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